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Inequality: Wealth, health and longevity · PDF file Income Inequality 65% Global Lifespan Inequality 18% ... Inequalities in Life Expectancy Among US Counties, 1980 to 2014 Temporal

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  • Non-Restricted (NR) Slide1

    UNIVERSITIES SUPERANNUATION SCHEME LTD

    Inequality: Wealth, health and longevity

    Guy Coughlan

    Chief Risk Officer

    21 September 2018

  • Non-Restricted (NR) Slide2

    Agenda

    • Introduction

    • Economic inequality

    • Lifespan inequality

    • The role of education

    • Conclusions

  • Non-Restricted (NR) Slide3

    Inequality can be good or bad

    Good

    Diversity • Biological – essential for evolution • Intellectual – different and better ideas • Cultural – richer life experiences • Workforce – supports commercial success

    Bad

    Opportunity • When it relates to inequality of opportunity

    Extreme • When it reflects extreme, unfair and avoidable differences

    We focus on the bad kind of inequality

  • Non-Restricted (NR) Slide4

    What’s so bad about this kind of inequality?

    At the individual level

    Poor outcomes in terms of:

    • Unfulfilled potential

    • Life satisfaction

    • Self esteem

    • Health

    • Lifespan

    At the societal level

    Poor outcomes in terms of:

    • Populism

    • Social cohesion

    • Democratic participation

    • Missed talent

    • Economic underperformance

    • Conflict

  • Non-Restricted (NR) Slide5

    The Global Financial Crisis shone the spotlight on inequality

    USA

    Economic inequality

    Source: Occupy Wall St

    "We are the 99%"

    So u

    rc e:

    M o

    vi m

    ie n

    to 1

    5 -M

    Spain

    Generational inequality

    Youth unemployment

    > 50%

    UK

    “How the baby boomers took their children’s future – and why they should give

    it back”

    26 Feb 2018

    Generational battle lines harden over pensions

    “Older workers not bearing their

    share of the pensions burden”

  • Non-Restricted (NR) Slide6

    Measuring inequality

    Economic

    Health

    Lifespan (Longevity)

    Education

    Employment opportunities

    Inequality variables:

    Top 1% share

    90/10 ratio

    Gini coefficient

    Inequality statistics:

    By: Gender

    Age (generation) Socio-economic group

    Geography Education attainment Parent characteristics

    Inequality breakdowns:

    Global Income Inequality

    65% Global Lifespan Inequality

    18% For example, Gini Coefficients:

  • Non-Restricted (NR) Slide7

    Agenda

    • Introduction

    • Economic inequality

    • Lifespan inequality

    • The role of education

    • Conclusions

  • Non-Restricted (NR) Slide8

    Income inequality is the most studied measure of inequality

    Global Income

    Inequality (Gini)

    69% 65% 61%

    2003 2013 2035 E

    Source: Hellebrandt and Paolo Mauro (2015), The Future of Worldwide Income Distribution

    % o

    f w

    o rl

    d p

    o p

    u la

    ti o

    n

    Income (PPP USD)

    Global income distributions 2003, 2013, 2035 E

  • Non-Restricted (NR) Slide9

    There is wide variation across countries of the income inequality within countries

    Source: Hellebrandt and Paolo Mauro (2015), The Future of Worldwide Income Distribution

    Gini coefficient - household per capita disposable income in late 2000s

    90/10 ratio - household per capita disposable income in late 2000s

  • Non-Restricted (NR) Slide10

    Improvements in the top 1% share of income have reversed in English-speaking countries since the 1980s

    Share of total income going to top 1% (before tax and transfers)

    US

    UK Canada

    Ireland Australia

    France Japan

    Spain Netherlands Denmark

  • Non-Restricted (NR) Slide11

    The whole distribution of income gives a the more complete picture

    • Experience is country specific

    80

    90

    100

    110

    120

    130

    140

    1975 1980 1985 1990 1995 2000 2005 2010 2015

    80

    100

    120

    140

    160

    180

    200

    220

    1975 1980 1985 1990 1995 2000 2005 2010 2015

    Real disposable household income*

    USA

    UK

    * Deciles 1 to 9. Income is adjusted for household

    size, inflation and price differences between countries and expressed in 2011 dollars.

    Source: Incomes across the Distribution Database, Nolan, Thewissen, Roser 2016 (Our World in Data)

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    Inequality in wealth exceeds inequality in income

    Distribution of global wealth

    Wealth inequality in the developed world is largely linked to property and pensions wealth

    The Guardian, Tuesday, 14 November 2017

  • Non-Restricted (NR) Slide13

    Country rankings of wealth inequality differ from income inequality

    Source: The Equality Trust; https://www.equalitytrust.org.uk/scale-economic-inequality-uk Credit Suisse Global Wealth Databook 2016

    OECD average 72.8%.

    Wealth inequality in different countries (Gini coefficient)

  • Non-Restricted (NR) Slide14

    Agenda

    • Introduction

    • Economic inequality

    • Lifespan inequality

    • The role of education

    • Conclusions

  • Non-Restricted (NR) Slide15

    Life expectancy increases with income – the “Preston Curve”

    GDP per capita (1990 $)

    Li fe

    E xp

    ec ta

    n cy

    a t

    B ir

    th

  • Non-Restricted (NR) Slide16

    Over time lifespan inequality has been falling

    Source: Peltzman 2009

    Journal of Economic

    Perspectives 23 (4) Fall

    175–190

    Gini coefficient for lifespan inequality

  • Non-Restricted (NR) Slide17

    Lifespan inequality has fallen as LE has risen

    • Trajectory of lifespan inequality vs. LE through time and across countries

    • Based on 9063 life tables for 212 countries

    Source: Smits and Monden 2009, Length of life inequality around the globe. Soc Sci Med. 68(6), 1114-23

    L if

    es p

    a n

    i n

    eq u

    a li

    ty Lifespan inequality vs life expectancy – Females age 15+, Sweden 1751-2005

    Global Sweden

  • Non-Restricted (NR) Slide18

    LE at birth by US county 2014

    Source: Dwyer-Lindgren, Bertozzi-Villa, Stubbs, et al. JAMA Intern Med. 2017. Inequalities in Life Expectancy Among US Counties, 1980 to 2014 Temporal Trends and Key Drivers. 177(7):1003-1011

    Gap: 90/10: 6.2 years 99/1: 10.7 years Max: 20.1 years

  • Non-Restricted (NR) Slide19

    Life expectancy inequality has been worsening across US counties

    Source: Dwyer-Lindgren, Bertozzi-Villa, Stubbs, et al. JAMA Intern Med. 2017. Inequalities in Life Expectancy Among US Counties, 1980 to 2014 Temporal Trends and Key Drivers. 177(7):1003-1011

    Relative inequality 99/1 ratio

    Absolute inequality 99/1 difference

    Life expectancy at birth inequality – US counties

  • Non-Restricted (NR) Slide20

    Within countries, lifespans are longer where income is higher

    • Preston curve for US counties o Similar to international Preston Curve

    o Longevity positively associated with income

    • Two counties separated by 350 miles could not be more different:

    o Fairfax County

    o McDowell County

    New York Times, March15, 2014. http://www.nytimes.com/interactive/2014/03/15/business/higher-income-longer-lives.html?_r=0 Sources: Institute for Health Metrics and Evaluation (life expectancy); socialexplorer.com (income data from the 1990 decennial Census and 2008-2012 American Community Survey)

    US male LE vs income by county Li

    fe e

    xp e

    ct an

    cy

  • Non-Restricted (NR) Slide21

    Life expectancy

    Percentage who:

    Are obese Who smoke Are insured Graduate from high schoolAre obese

    St. Johns

    Putnam

    St. Johns Putnam

    Number of residents per doctor

    Differences in LE from health status, education and lifestyle for two neighbouring US counties

    SOURCE: County Health Rankings and Roadmaps program, Robert Wood Johnson Foundation. The Washington Post. Published on March 10, 2013, 8:07 p.m. http://www.washingtonpost.com/business/economy/economic-inequality-contributing-to-gap-in-life-expectancy/2013/03/10/54b5d21c-89df-11e2-98d9-3012c1cd8d1e_graphic.html

  • Non-Restricted (NR) Slide22

    There are even wider inequalities in Healthy Life Expectancy – related to level of deprivation*

    Source: Public Health England. Public Health Outcomes Framework: Health Equity Report. Focus on Ethnicity PHE analysis of ONS data.

    Gap: 9.2 years male

    7.1 years female

    Gap: 20 years

    (male & female)

    * Level of deprivation as reflected in deciles of the Index of multiple deprivations (IMD)

    LE at birth (Males England)* Healthy LE at birth (Males England)*

    Level of deprivation Level of deprivation

  • Non-Restricted (NR) Slide23

    Life expectancy shows significant

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